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This past week, several consumer actions made headlines that affect the retail industry.

Federal Court OKs Large Warning Requirement for Cigar Products

A federal court has upheld forthcoming health warning requirements that will take up 30 percent of the principal panels of cigar product packages and 20 percent of cigar product advertisements. The court found that the textual warnings were “unambiguous and unlikely to be misinterpreted by consumers,” and that the cigar sellers retained sufficient space on their packaging and advertisements “in which to effectively communicate their desired message.” It also concluded that, under the Zauderer standard for commercial speech, the size, format and other design features of the warning statements were reasonably related to the government’s substantial interest in “providing accurate information about, and curing misperceptions regarding, the health consequences of cigar use.” The case is captioned Cigar Assoc. of Am. et al. v. FDA et al. No. 1:16-cv-1460 (D.D.C.). Continue Reading Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

Federal Court in New York Dismisses Diet Pepsi Case

A federal judge dismissed a complaint accusing Pepsi-Cola Co. of misrepresenting that its “diet” drinks help consumers lose weight. In the proposed class action, plaintiffs claimed that Diet Pepsi is made with no-calorie sweeteners, which allegedly contributes to weight gain and increased risk of metabolic disease, diabetes and cardiovascular disease. The judge rejected the plaintiffs’ studies, finding that the evidence indicated an association between the sweeteners and weight gain, but not causation. The judge also concluded that reasonable consumers understand that the “diet” label simply means low calorie. Continue Reading Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

FTC Expands Agency’s Leadership Team with New Consumer Protection Director

Federal Trade Commission Chairman Joseph Simons announced the appointment of Andrew Smith as Director of the agency’s Bureau of Consumer Protection, beginning next week. Smith is Chair of the American Bar Association’s Consumer Financial Services Committee and a Fellow of the American College of Consumer Financial Services Lawyers. From 2001-2004, he served as Assistant to the Director of the Bureau of Consumer Protection and FACT Act Program Manager, leading implementation of the FACT Act rulemaking, proceedings and studies. The vote to install Smith was 3-2, with the FTC’s two democratic commissioners filing statements in opposition. Continue Reading Consumer Protection in Retail: Weekly Roundup

Bumble Bee Foods’ woes continue to mount as its CEO, Christopher Lischewski, has been indicted for price fixing. The indictment alleges that Lischewski participated in the price fixing conspiracy from approximately November 2010 until about December 2013. Lischewski is not the first Bumble Bee executive to be charged: in late 2016 and early 2017, two Bumble Bee Senior Vice Presidents pled guilty to price fixing, and in May 2017, Bumble Bee agreed to pay $25 million in fines for price fixing.  Continue Reading Bumble Bee CEO Indicted over Price Fixing Allegations

This past week, several consumer actions made headlines that affect the retail industry.

FTC Swats Misleading Advertising Claims Just in Time for Mosquito Season

The FTC and makers of the “Aromaflage” line of products have agreed to settle charges that Mike & Momo, Inc., deceptively marketed its mosquito-repelling perfume sprays and scented candles. The company agreed to stop making unsubstantiated claims that its products repel disease-carrying mosquitos, work for 2.5 hours, and are as effective as 25 percent DEET. The FTC also alleged that Mike & Momo packed its Amazon storefront with five-star reviews written by the owners and close family members; under the proposed consent order Mike & Momo must disclose any “unexpected material connection” between the company and any endorsers. Continue Reading Consumer Protection in Retail: Weekly Roundup

E-commerce and online shopping are here to stay, but the explosion of new technology and the number of resources available to facilitate online shopping is an opportunity for retailers to embrace new ideas and concepts that will increase foot traffic to their physical locations. The store-within-a-store concept isn’t new, but the type of store-within-a-store retailers have conventionally seen is changing and bringing in new business. Continue Reading Retailers Should Ensure Flexibility in Lease Agreements for In-Store Partners

This past week, several self-regulatory advertising decisions made retail headlines.

Finish Quantum Dishwasher Detergent Beaten by “Unbeatable” Claim

In response to a challenge brought by P&G, the NAD recommended that Reckitt Benckiser LLC, manufacturer of dishwasher detergent brand Finish Quantum, discontinue its claims that the detergent provides an “unbeatable clean.” After reviewing Finish Quantum’s test data, the NAD determined that the “evidence was not sufficiently reliable to support the challenged ‘unbeatable clean’ claim.” Finish Quantum can, however, continue use of its value claim that its product provides “25% more loads,” so long as the claim is qualified by adding the phrase, “based on retail pack size comparison” between Finish Quantum and leading alternatives such as Cascade Platinum. Reckitt Benckiser stated that it will comply with the NAD’s recommendations. Continue Reading Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

Nectar Brand to Put Its “Made in America” Claims to Bed

Nectar Brand LLC has agreed to stop making unqualified claims that its mattresses were made in the United States. According to the FTC’s complaint, Nectar Brand sells mattresses under several brand names, including Nectar Sleep, DreamCloud LLC and DreamCloud Brand LLC. Nectar Brand’s ads and product labeling included statements that the products were “Designed and Assembled in USA.” In fact, the FTC alleged that the mattresses all are imported from China and that Nectar Brand has no assembly operations in the U.S.

Under the settlement terms, Nectar Brand is prohibited from representing that its products are made in the United States unless it can substantiate its claims. Further, Nectar Brand’s officers are prohibited from misrepresenting the country of origin of its products. Continue Reading Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

FTC v. AT&T Mobility: “Good News for Consumers” Per FTC Chairman

The Ninth Circuit Court of Appeals rules en banc in FTC v. AT&T Mobility, LLC, that the FTC could challenge AT&T’s broadband data throttling practices, despite the fact that AT&T is a “common carrier” subject to exemption under the FTC Act. The court ruled that the common carrier exemption was activity-based rather than status-based. Therefore, the FTC may challenge a carrier’s non-carriage unfair or deceptive acts or practices. Simply put, “a phone company is no longer just a phone company. The transformation of information services and the ubiquity of digital technology means that telecommunications operators have expanded into website operation, video distribution, news and entertainment production, interactive entertainment services and devices, home security and more.” Acting FTC Chairman Maureen K. Ohlhausen issued a statement praising the Ninth Circuit’s decision as “good news for consumers.” Continue Reading Consumer Protection in Retail: Weekly Roundup

This past week, several consumer actions made headlines that affect the retail industry.

TA Sciences Prohibited from Making False and Unsubstantiated Health Claims

Telomerase Activation Sciences, Inc. (“TA Sciences”) has agreed to stop making certain claims as to the anti-aging and other health properties of two of its supplement products, in response to FTC allegations that it made false or unsubstantiated claims regarding the products’ health benefits. The FTC’s order prohibits TA Sciences from misrepresenting that its products are clinically proven to reverse human aging, prevent or repair DNA damage, restore aging immune systems or increase bone density, or misrepresenting that such evidence or studies exists. The order also prohibits the company from (1) representing that paid commercial advertising is independent programing; (2) failing to disclose material connections between a product endorser and the company; (3) representing that any endorser is an independent user of the product; or (4) helping anyone else make false or misleading health and efficacy claims about its products. Continue Reading Consumer Protection in Retail: Weekly Roundup